May 10, 2018

Next offers sunnier profit outlook after strong quarter

A recent heatwave is likely to have given Britain's depressed retailers a boost, according to the head of Next, after the high street bellwether said it helped drive quarterly sales - prompting it to upgrade profit forecasts. In its digital division - which makes up a higher proportion of revenues at Next than for some rivals after it moved its long-running Next Directory catalogue online - sales rose 18 per cent. Shares in Next had risen 7.4 per cent by early afternoon on Thursday to £56.36 as the group also upgraded its pre-tax profit forecasts for the year from £705m to £717m. GlobalData analyst Sofie Willmott warned that "Although Next's results may offer a glimmer of hope to struggling UK retailers", those chains reliant on in-store sales for the bulk of their revenues would continue to be dragged down by consumers' shift away from the high street to online. Its smaller rival has climbed 7 per cent during this period, although M&S managed a more muted 3 per cent gain. At M&S, online sales amounted to less than 8 per cent of revenues last year.

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